Alberta-based fund manager AIMCo to get piece of US$219-million legal settlement from Genworth Financial

EDMONTON – A U.S. insurance company has agreed to pay US$219 million to finish a category action lawsuit for allegedly making false and misleading statements in regards to a group that includes the Alberta Investment Management Corp.

The agreement in principle from Genworth Financial requires approval from a U.S. district court in Virginia, where the insurance provider has its own head office.

Edmonton-based AIMCo – which invests with respect to 26 pension, endowment and government funds in Alberta – was one of the lead plaintiffs in the suit, along with the California-based Fresno County Employees’ Retirement Association.

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The plaintiffs argued that Genworth’s executives and financial statements had didn’t properly disclose information before the company announced in November 2014 that it would need to shore up its long-term care insurance business.

The announcement from the $531-million accounting charge was followed by a substantial drop in the need for Genworth stock held by AIMCo and other investors.

The Virginia-based insurance provider is constantly on the say the claims against it are without merit but has agreed to result in the payment to avoid the cost and chance of continuing the battle in the court.